Death tax misery as house prices rocket in Britain's housing boom

BRITAIN’S booming housing market has created more than 160,000 property millionaires in the past year, says research.

The inheritance tax threshold has failed to adjust with the rising cost of housing [GETTY]

The astonishing rise means there are now nearly half a million homeowners living in properties worth more than seven figures.

The bad news is that relatives of thousands of householders now face huge death duties because the inheritance tax threshold has failed to keep pace with the property market.

The figures will revive calls to abolish the hated tax, which is backed by a Daily Express crusade for it to be scrapped.

Up to 40 per cent is charged on estates worth more than £325,000 where one person is the owner.

Property website Zoopla says the total number of property millionaires in the UK last year was 484,000, up 160,397 since 2012-13.

Treasury’s coffers were swollen by £3.4billion in inheritance tax in the last financial year, thanks in part to runaway house prices, compared to £3.1billion received the year before.

Most people would not dream of calling themselves wealthy but many people living in ordinary three-bedroom houses could be caught up in this

Ros Altmann

The number of Britons paying inheritance tax is expected to rise by more than a third this year and double over the next five years. Ros Altmann, the Government’s business champion for older workers, said: “Inheritance tax was designed to stop people passing on huge amounts.

“Most people would not dream of calling themselves wealthy but many people living in ordinary three-bedroom houses could be caught up in this. There has to be an overhaul of the inheritance tax laws.”

Zoopla found that the 10 most expensive streets in Britain – all in London – have seen values surge by 12.9 per cent over the past year.

COMMENT

Inheritamce Tax was designed as a tax only on the very wealthiest.

But the failure of successive Chancellors to move the thresholds as Britain’s property market has exploded has meant hard-pressed families, by no means rich, have been forced into handing over even more of their own money to the taxman.

Today’s figures only deal with the top end of the property market. But there are thousands of homeowners in far cheaper homes who are being dragged into the inheritance tax bracket.Earnings and assets are already taxed during people’s lives, and taxing them again even after death cannot be right.

At what is already a painful time for families, having the Chancellor turn up with a substantial tax bill is not just insensitive but for many is the difference between being able to hold on to the family home or not.